10 Steps to Mastering the Doorstep Economy

When you combine a master’s degree in electrical engineering with an MBA from MIT, you get a number-loving marketer who knows how to shift a culture to become performance-based. This is exactly what Nutrisystem needed in November of 2012 when Dawn Zier stepped in and delivered a much-needed turnaround.

Background on Dawn Zier’s Successful Turnaround

In late 2012, Dawn Zier took the helm at Nutrisystem. The stock price had gone from roughly $70 to $7 after five straight years of declining revenues and profits. Dawn immediately embarked on an ambitious 4-point turnaround and growth plan. Her mission in 2013 was to fix it fast, and 2014 and beyond has been about innovation and growth. In 2014, the company experienced its first full year of revenue growth in 7 years.

In 2015 and 2016, she championed a strategic vision centering on building a multi-brand and multi- channel approach to capture a more significant share of the weight loss market and to expand into the broader health and wellness space.

Under Dawn’s leadership, Nutrisystem recently reported its third consecutive year of double-digit growth and is entering 2017 with a track record of 14 quarters of consecutive year-over-year revenue growth. The overall result is resurgence at Nutrisystem under Dawn’s leadership. Guidance for 2017 implies that the Company will have its fourth consecutive year of double-digit growth. Both the Company’s profits and stock value have increased more than 6X during her tenure and surpassed the $1 billion market cap mark. The iconic brand’s luster is clearly back. So what changed?

10 Steps to Mastering the Doorstep Economy

I had an opportunity to sit down with Dawn Zier earlier this month and asked her to share her formula that helped stem the tide of declining revenue and deliver double-digit growth. Here are the top 10 things she did to master the doorstep economy:

1. Listen to What Your Customers Really Want – Not What You Want. Prior to Dawn’s arrival, a new management team had come in and focused on food quality. They did a fantastic job changing the quality of the food. So much so, that they fell in love with what they did and began thinking of Nutrisystem as a food company instead of what their customers really wanted: a weight loss company. “Don’t overplay your strength,” Dawn explains. “Nutrisystem was talking about its food quality while cutting the price. The positioning became cheap gourmet food instead of the core benefit of weight loss. So we had to reposition the brand to be about weight loss again and tweak the messaging so that it resonated.”
2. Understand How Macro Trends Impact Your Business (Such As The Doorstep Economy). Food delivered to the home has gone mainstream, even though home food delivery has been Nutrisystem’s core business for the past two decades. With Amazon training customers to expect 24 to 48 hour delivery to their homes, people expect everything to be delivered at the touch of a button. Nutrisystem studied the impact of the Doorstep Economy and further extended this on-demand macro trend to counselors as well – allowing their customers to talk to counselors whenever they wanted.
3. Shift Your Culture to Become Fact-Based. “A huge cultural shift occurred when we trained our team to focus on just the facts and not opinions,” says Dawn. “Fact-based conversations provided common ground and allowed our junior people to call out the opinions from the facts.” How many companies (still) operate based on senior executives stating their opinions as facts? If you’ve built a top-down culture without requiring data to tell the story, you can see how any company can quickly lose touch with the very customers they are charged to serve.
4. Tap Into the Often Overlooked Major Source of Innovation: Your Call Center. “Nutrisystem is lucky to have its sales and customer service counselors on the second floor of our building,” Dawn explains. “But no one was talking to each other. I saw our contact center as the first line of defense and a major source of innovation. They could tell you what the customers like, want, don’t like and want changed.” This is another great insight as many executives tend to wall up in their own offices and conference rooms rather than speaking directly to their customers. Or, at the very least, to those on their staff that are closest to their customers.
5. Your Website is Magic. Why do you put the button on the left versus the right? What is the sales lift if the button says “Buy” or “Add to Cart”? With her engineering background, Dawn was eager to test and learn in real time. “Where you focus the customer’s attention can change customer behavior,” says Dawn. “Your website is where you can test pricing strategies, and get more clinical with your user experience. Websites are magic. You make a small change and immediately see the impact of that change.”
6. Beware of Cultural Shifts in Your Industry. “The weight loss industry has changed,” says Dawn. “Most women don’t relate to the skinny models. Most are moms, 40 or older, and are looking to lose 40 pounds. We’ve transitioned from vanity to health and our customers have more permission to spend to be healthy for their entire family.” From vanity to health focus. If you weren’t paying attention, you might have missed the shift and lose touch with the real focal point of your customers. Sure, someone who is overweight would prefer to look good, but if their real focus is health-related they will be more inclined to respond to messaging that focuses on overall health – not just how they look in the mirror.
7. Marry Your Marketing to Your Numbers. “Having a strong CFO who is as passionate about digging into the numbers as I am has been a real advantage,” Dawn explained. “I’m a marketer and I love numbers. Nutrisystem is a marketing company. Which is why I also have a fantastic CMO. By combining the marketing and the numbers, I have two strong sets of eyes on everything.”
8. Train Your Data Scientists to Synthesize and Summarize. “We are beginning to use data scientists,” says Dawn. “These are very fluid conversations driven by marketing. What are we looking for? What are our key metrics? What measurements and reports are most meaningful? It’s important to train your data scientists to summarize what we’re looking at and identify the things you want to pay attention to; it’s about making the analytics come alive in plain English.” No one wants to drown in Big Data and everyone is starving for better insights. You’ll only get what you specifically ask for when you take the time to identify what you need.
9. Reformulate Your Product(s) Based on Customer Feedback. “We are constantly looking at what people order and how they rate their items,” Dawn says. “Buying habits and feedback inform product priorities. We even switched a pizza vendor based on customers not liking the new formulation. When something drops from a 5 star rating to a 2 star rating, you must get on top of that immediately.” Clearly, if you’re not even watching what your customers are saying about your products, you’re at a disadvantage to your competitors who are listening and, better yet, responding based on what they learn.

10. Think Through and Map Your Customer’s Journey. “Start by building out the front-end,” Dawn explains, “but your back-end is where your profits are made. Extend the lifetime value.” As you may have seen in some of my previous articles on mapping your customer’s journey, this is something I spent a lot of time advocating. Most businesses focus on the “discovery” and “activation / engagement” phase so that they can drive to the “transaction” phase. The real profits are in the “advocacy” phase as this is where your customers become raving fans and exponentially fuel your growth.

Take it from a well-established leader in the Doorstep Economy. Nutrisystem has had its ups and downs, but the last 5 years have seen sustained and substantial growth. Implementing these insights will help ensure your business is maximized and optimized to its fullest potential.